Variable pay cut after weak quarter for Infosys employees

BENGALURU: Asia's second-largest software exporter Infosys has slashed quantum of variable payouts for employees after the Bengaluru-based firm posted results that fell short of expectations and was forced to trim its full-year revenue forecast.

In a quarter that Infosys saw high attrition rates of about 21 per cent, the company is handing out 75 per cent of variable pay to employees, down from the 90 per centpayouts in the March quarter.

The company, however, is taking steps to curb attrition. Despite a weak quarter, Infosys is handing out a higher number of promotions this quarter and promoting about 2,500 employees.

In the March quarter, it promoted 2,147 employees. Infosys also relaunched its employee stock option plan (Esops) after a gap of over a decade and said it would reward 7,500 junior to midlevel employees with ESOPs.

"We are rewarding about 7,500 of our employees from junior to middle-level management with restricted stock options and we will extend it to the middle management to senior leaders and title holders subsequently," Infosys chief operating officer UB Pravin Rao said.

Global human resources chief Krishnamurthy Shankar told ET that attrition rates in the quarter were not overly surprising and were seasonal in nature, as new hires typically leave for higher studies.

Shankar added that attrition rates would hopefully be back to normal over the coming quarters.

The number of employees who left the firm in the quarter-ended June rose to 10,262 from 8,373 in the quarter-ended March.

This is in stark contrast with attrition rates at rival Tata Consultancy Services, which narrowed to 13.6 per centin the first quarter, the lowest in several quarters as it took steps to control the loss of employees.